Cleantech in Québec - Écotech Québec · The data presented here were compiled from the survey...

Cleantech in QuébecA dedicated baseline study of pureplay clean technology companies in Québec

About the survey .......................................4

1. Clean technologies defined ....................6

2. The cleantech sector in profile ...............9

3. Conclusion ...........................................24

Appendix .................................................26

Contents1

3

2

Building a better working worldIn a fast-paced world where change is the only constant and opportunities abound in the face of challenge, EY’s purpose is doing our part in building a better working world.Building a better working world means taking an active role in shaping a new framework for progress. We believe it also means having a strong sense of obligation to use our talent and knowledge to help our community. This survey is a perfect fit with our commitment to promoting a culture of respect for the environment and building a better working world.

2 | Cleantech in Québec

With growing public awareness of climate issues and increasing commitment from governments, Québec’s booming cleantech sector has businesses paying close attention.

Cleantech embraces all sectors of the economy. From green process innovations for food production and sustainable natural resource management to driving energy efficiency in manufacturing, real estate and transportation, every area of activity is affected.

Cleantech offers companies major business opportunities, placing a clear focus on rethinking operations to reduce their environmental footprint. But while it cuts across all sectors of the Québec economy, cleantech is relatively unknown.

This report sets a baseline for a later, more in-depth, exploration of companies whose main focus is clean technologies. Businesses whose core value proposition is to derive greater benefits from improved environmental and economic outcomes are pureplay cleantech companies.

I would like to thank Écotech Québec, our main collaborator in producing this report. I also want to thank all the respondents and the many other stakeholders I met in carrying out the survey. They have helped to assemble the basic information to bring into clear focus what until now have been little-known players in the clean technology industry, pureplay cleantech companies, which nonetheless deserve full recognition for their contribution to Québec’s economic and social development.

I hope you enjoy our report!

Patrick Bossé Québec Energy Sector Leader

Foreword

Cleantech in Québec | 3

Green economy. Sustainable growth. Climate change mitigation. Low-carbon society. Paris Agreement on Climate Change. Clearly, there is no lack of fertile ground for novel ways to meet the needs of both today and tomorrow.

Clean technology has a pivotal role to play, and yet remains a sector that many people are unaware of. Often difficult to define, the cleantech ecosystem involves a host of actors: entrepreneurs, users, researchers, investors, influencers, accelerators, among others. But greentech innovations are at work across all sectors. Cleantech is everywhere! And that’s precisely what makes it so hard to get a handle on this fast-growing industry.

In a climate where governments have shown a clear willingness to go green, consistent and accessible cleantech data have become crucial to developing policies and programs to support sector growth. Together with EY, we decided to more clearly carve out a part of this ecosystem — companies actively engaged in developing and commercializing innovations. We wanted to know more about their makeup, how they’re evolving, the challenges they face and their outlook for the future. This baseline survey allows us to better grasp what drives these entrepreneurs.

We owe our sincere thanks to the EY team for this tremendous work which has given us insight into these innovative entrepreneurs who help improve our quality of life.

Denis Leclerc President and Chief Executive Officer, Écotech Québec

Positioning Québec firmly in the global green economy

Écotech Québec represents Québec’s cleantech cluster, supporting key players such as companies, researchers, investors and sector-based associations to accelerate the development, financing and commercialization of clean technologies. A non-profit organization, Écotech Québec receives financial support from a number of private and public sector players.


About the survey

This report is based on a survey carried out from June to August 2017. Approximately 100 Québec pureplay cleantech companies participated. The data presented here were compiled from the survey responses received.

The main objective of the survey was to measure the size, strength and impact of these businesses in Québec, and to serve as a future benchmark against which sector growth may be measured over time.

A liftoff study to set the baselineQuébec’s cleantech ecosystem is extensive. For this first phase, the survey considered only businesses that innovate in cleantech design and development, new business models or service offerings, and for which innovation is the key focus of their value proposition — pureplay clean technology companies.

Our report does not include users who incorporate clean technologies into their own operations or companies where only one department or division is dedicated to cleantech development. Nor does it include companies that generate energy for resale, specialized consultants, influencers or parts suppliers and service providers.

The companies selected to participate in the survey were identified and sorted from multiple lists provided by public and private organizations. Invitations to take part in the survey were sent to some 350 businesses that, at first glance, met the criteria for pureplay cleantech companies and were registered in the Québec Enterprise Register. The selection and invitation process was carried out by Écotech Québec.

That being said, this survey does not aim to provide an exhaustive overview of the cleantech ecosystem. It must be taken as a first attempt to better understand the cleantech sector in Québec.

In recent years, cleantech has grown both globally and throughout Québec. Despite its increasing importance across all sectors of our economy, no clear profile of its true place in Québec exists that would allow us to compare the situation at home with other markets. Our goal was to provide a baseline to bridge that gap.

About the resultsBecause they operate in an emerging sector, cleantech companies are difficult to identify. Not only is there no NAICS code that applies to them as a group, but a significant number are startups. In reviewing the survey results, readers should keep in mind that many sector startups remain under the radar and thus escape analysis.

It should also be noted that the data presented were compiled from the responses provided by pureplay cleantech companies themselves and were not audited or otherwise reviewed.


Pureplay cleantech companies

R&D services

Specialists and influencers

Parts suppliers and service

providers

User entities

Researchand training

Incubators/accelerators

Governments

Unions and associations

Public/privatefunding

Québec pureplay cleantech companies at a glance

• Around 350 companies1

• Close to 9,000 jobs2

• Total annual revenue: more than $1 billion2

• Annual investments in R&D: nearly $300 million2

1 Pureplay cleantech companies identified and sorted by Écotech Québec.2 Extrapolation of survey data from 350 companies.

The cleantech ecosystem


1Clean technologydefined

Given the emerging status of the cleantech sector, an internationally recognized definition has yet to emerge. That being the case, a look at the definitions used by major ecosystem players is revealing.

The following definition is helpful:

“Clean technology, or ‘cleantech,’ should not be confused with the terms environmental technology or ‘green tech’ popularized in the 1970s and 80s. Cleantech is new technology and related business models offering competitive returns for investors and customers while providing solutions to global challenges. Where greentech or envirotech represents the highly regulatory driven, ‘end-of-pipe’ technology of the past (for instance, smokestack scrubbers) with limited opportunity for attractive returns, cleantech addresses the roots of ecological problems with new science, emphasizing natural approaches such as biomimicry and biology.”1

These technologies can also be delineated using the definition offered by Sustainable Development Technology Canada (SDTC) in its 2016/2017 annual report. SDTC is an arm’s-length foundation created by the Government of Canada to support projects that develop and demonstrate “new technologies to address issues related to climate change, air quality and clean water and soil.” SDTC invests in “Canadian companies that, through their innovative technologies, contribute positively to Canada by creating quality jobs, driving economic growth and protecting the environment.”2

Lastly, because it reiterates the key points in both of the others, we have chosen for this study the definition of clean technologies articulated by Écotech Québec, Québec’s cleantech cluster:

Clean technology — also known as cleantech, green technologies, greentech, eco-innovations, ecotechnologies and ecotech — is part of a sustainable development outlook that includes new products, services, technologies and processes that:

• Significantly reduce negative impacts on the environment (environmentally effective)

• Offer users superior performance at a lower cost (economically superior)

• Help improve quality of life by optimizing resource use (socially responsible)3

1 Clean Technology Venture Investment Reaches Record $8.4 Billion in 2008 Despite Credit Crisis and Broadening Recession, Cleantech Group, 2009-01-09.2 Annual Report 2016/2017, Sustainable Development Technology Canada.3 Écotech Québec website, Clean Technologies tab.


2The cleantech sector in profile

Cleantech companies already have a solid presence in Québec, where startups operate alongside more established companies.

Nearly six in ten businesses were launched in the last ten years, and nearly one in three is under five years old.

The people behind the businessesThe lion’s share of founders studied science or technology. This is not the first time around for most of them, who already have previous startups under their belts.

• Nine in ten founders studied science or technology

• Three in five founders have already launched at least one other business in their careers

• One in five founders is a woman

Only one in ten businesses over ten years old was founded by a woman, but the ratio triples for businesses under five years old, with three in ten founded by women.

Under 5 years5 to 10 years10 years and up

29%

27%

44%


The cleantech sector in profile (cont’d)

A diverse workforceThe vast majority of the sector is made up of small businesses. In fact, 50% of businesses have 13 employees or fewer. While businesses average 27 employees, 80% have fewer than that.

The survey provides a breakdown of the pureplay cleantech workforce. It shows that employees’ education levels are particularly diverse and balanced: 53% of employees have a college, high school or trade school diploma, while 47% have a university degree ranging from bachelors to PhDs.

The survey shows that the average salary in cleantech firms is about $60,000 per year and that one in four employees earns over $75,000.

Education snapshot

Secondary school, trade school

certificate (36%) or CEGEP diploma (17%)

University degree: bachelor’s (26%),

master’s or PhD (21%)

53% 47%

Breakdown of employees by salary

Over $100,000

$75,000 to $99,999

$50,000 to $74,999

$25,000 to $49,999

Under $24,999

13%

11%

36%

34%

6%


Access to talent: an asset for QuébecCompanies surveyed on the ease of operating in Québec’s cleantech industry were asked to score a series of factors as more or less favourable to their development. Access to qualified resources was cited as the most favourable factor, as we will see later on.

An attractive sector

Pureplay cleantech companies should continue to have a pool of talent to draw on in the years ahead. According to a US survey conducted by EY in 2017, clean technologies enjoy a big draw with young people under 20. They strongly believe that polluting companies don’t have their generation’s best interests at heart and see themselves as the most heavily affected by the long-term environmental impacts. In all, 66% of young people find the prospect of landing a job in clean technology attractive.

EnviroCompétences: a roundup of available trainingQuébec’s cleantech companies have access to a large pool of talent and highly diverse expertise. EnviroCompétences,4 the province’s environment sector workforce committee, took a census of the vocational, college and university environmental training programs offered in Québec. It shows that the Québec education system offers a wide range of training options, as well as numerous green economy university and technical programs.

4 Répertoire des formations diplômantes au Québec, EnviroCompétences, 2017.


Cleantech sectorsAccording to the survey, almost three-quarters of respondents felt that their activities primarily involved product development and marketing (73%), while the remaining quarter saw them as service related (27%).

The energy sector is an important part of the cleantech economy. In fact, 43% of clean technologies are used for renewable energy production, energy efficiency, eco-mobility or energy storage and distribution.

Beyond these, waste (15%) and water (13%) are well represented in Québec.

Interestingly, about half of the companies operate in two sectors. The results have been weighted to take this into account.

16% Renewable energy

15% Energy efficiency

9% Eco-mobility

3% Energy storage and distribution

15% Waste

13% Water

10% Green chemistry and new materials

7% Air

4% Soil remediation

8% Other

ENER

GY


What markets are targeted? Today, sales are predominantly business-to-business (78%), with public and institutional markets coming in a distant second (17%).

On the other hand, half of all businesses indicated that their products and services are suitable for both the public and institutional markets.

INNO+Cited in the Québec Research and Innovation Strategy as “a proven means for identifying creative solutions to meet environmental challenges,”5 the INNO+ formula developed by Écotech Québec aims to generate more business opportunities between organizations grappling with environmental challenges and pureplay cleantech companies. The aim of INNO+ is twofold: first, to increase the productivity and competitiveness of businesses in a range of industries and, second, to promote the commercialization of made‑in‑Québec innovations.


5 Québec Research and Innovation Strategy, 2017-2022, Government of Québec, 2017.

*Respondents selected several applicable sectors

Real estate

Other segments

Chemicals and

pharmaceuticals

Transportation

Mining and ore processing

Construction

Forestry and forest products

Oil and gas and liquefied natural gas

Energy and utilities

Aluminum

Public and institutional

Manufacturing

Agricultural production and food

processing

46%

27%

25%

22%

22%

21%17%

16%

13%

13%

12%

8%and under

27%

Key cleantech markets of application*


Growing revenues and rising exportsHalf of the companies generated revenues of under $650,000 in 2016. While pureplay cleantech companies averaged revenues of about $3 million in 2016, 80% fell below that threshold, a further indication that small businesses make up the lion’s share of the sector.

Pureplay cleantech companies generated 58% of their 2016 revenues in their home market of Québec.

In 2018, the companies expect to double their 2016 revenues. While all regions are set to grow, the United States is expected to lead the pack, accounting for 40% of anticipated growth. As a result, Québec cleantech companies expect to generate nearly one quarter (24%) of their revenues in the US, compared with 8% in 2016.

The companies were also surveyed on certain macroeconomic risks and, in contrast to their forecasts for strong international growth, nearly half of pureplay cleantech companies are concerned about the risks associated with US government policies and the possible decline in global trade due to protectionism and increased state intervention.

Key risksBreakdown*

Uncertainty surrounding US government policy

48%

Increased state intervention 38%Volatility in currencies, commodities and other capital markets

32%

Rising protectionism 28%Global geopolitical instability 23%Restrictions on employee mobility/barriers on movement

15%

Cyber security threats 12%Other 16%

*Multiple answers allowed

Québec on the international stageWith the adoption of its new International Policy and the 2016 2020 Québec Export Strategy, the Government of Québec has raised the profile of its foreign delegations, which promotes the influence and competitiveness of the clean technology industry beyond our borders. Other organizations, such as the Canadian Trade Commissioner Service and the clusters comprising the International Cleantech Network, of which Écotech Québec is a member, also provide springboards for Québec companies expanding into international markets by supporting them in identifying clients, complementary expertise or strategic partners.

Breakdown of global revenues in 2016

QuébecUnited StatesEuropeRest of CanadaOther

6%

9%

20%

8%

58%

24%



Sharply higher investment in R&DHalf of the companies invested under $200,000 in R&D in 2016. On average, investments in innovation totalled $820,000 per business, yet only 20% actually spent that amount. In 2016, the companies invested an average of 27% of income in R&D.

Investments in R&D are expected to total some 60% in 2018.

Protecting intellectual property Among the businesses surveyed, 55% held at least one patent. Excluding companies that hold 50 patents or more, the businesses hold an average of four.

The majority of businesses, or 57%, reported that protecting intellectual property was an important issue. Conversely, 12% of businesses felt that protecting intellectual property was not a concern.

Not a concernA moderate concernA significant concern 31%

12%

57%

Intellectual property

Intellectual propertyWe have no data available on the other strategies for protecting IP. However, this profile, while partial, shows that a great many Québec pureplay cleantech companies are not protecting their innovations. This finding is supported by the study, Forging a Cleaner and More Innovative Economy in Canada,6 which notes, “Whereas Canada was shown as leading when it comes to research, in particular cleantech research undertaken by academic institutions, Canada failed to compete in commercializing that research into market-ready technologies, as measured by the number of filed cleantech patents.”

6 Forging a Cleaner and More Innovative Economy in Canada, a study by Gilles Duruflé in conjunction with Louis Carbonneau, produced jointly by Cycle Capital Management and Sustainable Development Technology Canada, December 2016


Access to funding a key issueHalf of businesses have raised less than $1 million in financing since inception. While they averaged $10 million each, only 15% of businesses raised more than $10 million.

In general, over half of all funding is provided by the founders and their entourage (54%). One quarter of funding comes from public coffers (22%), particularly through government programs or incentives. The remainder is raised mostly from venture capitalists (17%).

When surveyed on the ease of doing business in Québec as a cleantech, companies were asked to score a series of relatively significant barriers to business development. The red tape surrounding funding applications was cited as one of the biggest barriers, as noted below.

Public fundingFounders and entourageVenture capitalOther

54%

22%

7%

17%

Cumulative funding sources since inception

Critical components to innovate“Canada has lagged behind the United States on a per capita basis in both venture capital and debt financing, both critical components in helping companies innovate, scale up their operations and commercialize their technologies.”7 This conclusion was demonstrated in a study8 on Canada’s competitiveness regarding the financing chain for the cleantech sector, which benchmarked Canadian cleantech companies against US cleantech companies and identified strengths and weaknesses in relative economic terms.

7 “Canada’s Global Competitiveness Threatened by Lack of Adequate Financing of Cleantech Innovations,” press release, December 2016.

8 Forging a Cleaner and More Innovative Economy in Canada, a study by Gilles Duruflé in conjunction with Louis Carbonneau, produced jointly by Cycle Capital Management and Sustainable Development Technology Canada, December 2016.



When it comes to government programs, scientific research and experimental development (SR&ED) incentives are the most accessed, by 55% of companies. Next are federal and Québec HR programs, with uptakes of 39% and 29%, respectively.

Utilization of government programs

Business incentivesMany cleantech companies may not know they qualify for Québec and federal refundable credits under SR&ED tax credit programs they have yet to discover. And since registering for the array of tax incentives available can seem daunting and cumbersome, some don’t even apply.

Businesses would be wise to consult professionals who specialize in SR&ED and other business incentives for help with all the paperwork to capitalize on tax credits and a wide range of other business incentives. There are also incentives for client companies that adopt clean technologies. Cleantech companies should learn about these programs and build them into their value proposition.

The most popular government incentive programs available to businesses are covered in the appendix.

!FE

DERA

L

SR&ED 55%

Human resources 39%

Sustainable Development Technology Canada (SDTC) Foundation

19%

Export 12%

Marketing 7%

Other programs 5%

QU

ÉBEC

SR&ED 55%

Human resources 29%

Export 29%

Marketing 26%

Other programs 5%


Funding to drive future growthWhen asked about anticipated funding requirements through the end of 2018, over half (54%) of businesses reported needing $2 million or more, with 29% answering $5 million or more.

R&D and marketing were the top reasons for this funding, particularly in international markets.

Funding requirements overthe next two years

Under $1 million$1 million – $2 million$2 million – $5 million$5 million – $20 millionOver $20 million

31%

15%25%

20%

9%



Barriers to growthWe surveyed businesses on the funding, market access, talent and innovation barriers they face. We noted that talent and innovation issues are not seen as key detractors. Financing and, to a lesser extent, market access came out on top.

Category Barrier Average score

out of 5

Funding Funding of commercial pilot projects and commercial value demos for technologies 3.41

Red tape surrounding funding applications 3.40

Identifying funding sources and understanding eligibility criteria 3.07

Innovation financing (R&D) 3.03

Market access

Regulatory, approval and zoning issues 2.95

Compliance and certification 2.95

Export expertise and market intelligence 2.64

Service or technology pricing and competitiveness 2.82

Low relative cost of water, waste landfill, electricity or fuel 2.52

Carbon market; Québec’s cap-and-trade system for GHG allowances 2.08

Electricity generated in Québec from renewable sources 1.86

Innovation Technology development 2.66

Access to testing and lab facilities 2.44

Supply 2.36

Procurement and defence of intellectual property 2.34

Access to mentoring and accelerator programs 2.16

Talent Employee compensation and retention 2.83

Access to sales, marketing and communications talent 2.68

Access to qualified production and installation resources 2.61

Access to qualified R&D resources 2.61

1 — None 2 — Low 3 — Medium 4 — High 5 — Very high


Does Québec stack up?We asked respondents to score Québec on various criteria, including the regulatory environment, starting a business, and access to a skilled workforce, markets, and public and private funding.

As previously discussed, access to a skilled workforce scored most favourably, with access to markets and funding perceived to be most problematic.

Scoring the Québec business environment

1 — Very poor 2 — Poor 3 — Neutral 4 — Strong 5 — Excellent

Skilledworkforce

Starting abusiness

Regulatoryenvironment

Access to publicfunding

Growing thebusiness

Access tomarkets

Accessto private

funding

3.69

3.15

2.96

2.86

2.81

2.66

2.46

Average out of 5

A cleantech showcase for QuébecUnproven technologies can be a hard sell with major private buyers, but leveraging public procurement to host demonstration projects in live deployments could boost adoption of Québec cleantech. These showcases would allow entrepreneurs to place the economic and environmental virtues of their clean technologies on display to prospective clients. Public procurement can drive big growth by:• Helping smaller cleantech companies

achieve critical mass• Hosting demonstration and

prototyping projects• Extending the marketing reach of

cleantech companies by framing real-life user benefits

• Accelerating adoption of a range of clean technologies

• Promoting Québec cleantech entrepreneurship and innovation worldwide



Company position in three years’ time

Significantlybetter

Moderatelybetter

Steady

Worse

76%

16%

6%

2%

Assessing where you are today Achieving market leadership

Accelerated growth

The EY 7 Drivers of Growth

Having a vision for growth is a good start, but do business leaders also have a clear roadmap with specific objectives, timelines and individual owners to get there?

We examined the growth journeys of a multitude of companies around the world, ranging from startups to market leaders.

Our research concluded that entrepreneurs who focus on a broader set of activities and find the right balance can not only accelerate growth, but ensure it is sustainable. It’s built around the EY 7 Drivers of Growth: people, technology, operations, customer, funding, transactions and alliances, and risk.

EY Growth Navigator™ uses the EY 7 Drivers of Growth to help business leaders think differently about growth and collaborate to achieve their ambitions.

Cleantech companies upbeat about the futureAs noted earlier, cleantech companies foresee strong business growth over the next two to three years. They expect R&D spending to surge 60% and revenues to double over the period.

And these growth forecasts are reflected in their confidence in the future. In fact, 92% of respondents expect their company position to be better in the next two to three years.

EY Growth Navigator™


3Conclusion

The vast majority of Québec pureplay cleantech companies are small businesses that are upbeat about the future. They see talent as their top development asset and capitalize on cleantech’s big draw with young people.

Access to funding and markets is seen as central to their ambitions, yet protecting their innovations and claiming the tax credits and incentives they qualify for remain on the to-do list for many cleantech companies.

Exploring new ways to streamline the funding environment and, in particular, cut down on red tape should be a top priority for the other players in the cleantech ecosystem.

The partial portrait of Québec cleantech companies in this report can serve as a baseline for a more extensive study. The data collected can also be used to keep tabs on Québec cleantech companies over time, and compare and contrast conditions at home with developments in other markets.


Program name Description Financial assistance*

Fede

ral

Scientific Research and Experimental Development (SR&ED), Revenue Canada, Revenu Québec

Federal and Québec tax incentive program designed to encourage Canadian businesses to conduct R&D in Canada

Provides two types of assistance: federally – assistance or refund 15% or 35%; provincially – 14% to 30% refundable

Strategic Innovation Fund, Canadian Government

The program is designed to support businesses of all sizes and comprises four streams: (1) Encourage R&D necessary to accelerate technology transfer and commercialization of innovative products, processes and services; (2) Facilitate the growth and expansion of firms in Canada; (3) Attract and retain large-scale investments in Canada; and (4) Advance industrial research, development and technology demonstration through collaboration between academia, nonprofit organizations and the private sector.

Combined government financial assistance for a project must not exceed 50% of the cost of the project.

Build in Canada Innovation Program (BCIP), National Research Council of Canada

This federal program helps Canadian companies of all sizes move their state-of-the-art goods and services from the laboratory to the marketplace.

Financial assistance of up to $500,000 for non-military innovations

Internship programs: EYC and Natural Resources Programs, ECO Canada

Internship program open to eligible employers who work in science, technology, engineering, mathematics (STEM) or natural resources

Financial assistance of up to 50% of an intern’s salary (up to $15,000) for new full-time environmental jobs

SD Tech Fund, Sustainable Development Technology Canada (SDTC)

SDTC funds Canadian cleantech projects and coaches the companies that lead them as they move their groundbreaking technologies to market.

Financial assistance of up to 33% of the eligible demonstration project expenditures

Industrial Research Assistance Program (IRAP), National Research Council of Canada

IRAP provides financial support to qualified small and medium-sized enterprises (SMEs) in Canada to help them undertake technology innovation.

The contribution is $50,000 to $250,000 per project.

Applied Research and Development Grants, Natural Sciences and Engineering Research Council (NSERC)

ARD Grants support well-defined applied research and development projects undertaken by college researchers with their private-sector partners. Direct project costs are shared by the company partner(s) and NSERC. Projects may range from one year to three years in duration.

The contribution is from $25,000 to $50,000.

Québec Economic Development Program (QEDP), Canada Economic Development

The program encourages businesses to innovate, adopt a technology or provide technology transfer.

Financial assistance can consist of repayable or non-repayable contributions. This assistance generally translates into up to 50% of authorized costs for SMEs.

Youth Employment Program – Green, NRC IRAP

The program is designed to encourage SMEs in the green economy or green industry sectors to hire a qualified 15- to 30-year-old to have a positive impact on the environment.

Eligible SMEs receive a financial contribution of up to $10,000 toward the salary of a young full-time intern for 3 to 6 months.

Elevation and Acceleration programs, Mitacs

The programs are designed to bring doctoral students and companies together in research projects. These programs provide companies with access to academic expertise, additional funding and personalized support from Mitacs.

Financial assistance consists of a contribution of $25,000 per year of salary for up to two years (Elevation) or a contribution of $7,500 (Acceleration). Note that the contribution for Mitacs Québec may vary.

Canada Export (CANExport), Trade Commissioner Service of World Affairs Canada

The program provides financial assistance to Canadian SMEs seeking new export opportunities and new markets, particularly in priority sectors and markets with high growth potential.

Financial assistance may cover up to 50% of eligible expenses, with a $10,000 minimum and $100,000 maximum.

Sustainable Development Technology Program Canada (SDTC)

The program is designed to fund cleantech projects and coaches the companies that lead them as they move their groundbreaking technologies to market.

Financial assistance can cover up to 33% of eligible project costs but not more than 50% of eligible costs of a given project.

AppendixGovernment incentive programs

* The information presented was effective as of 1 November 2017.


Program name Description Financial assistance*

Qué

bec

Programme PME en action – Support for the implementation of investment projects, MESI

This program is intended to support the conduct of studies prior to the implementation of investment projects in Québec, by companies from Québec or elsewhere, with a view to increasing competitiveness and productivity, job creation and sustainable development.

A non-refundable contribution up to 40% of eligible project expenditures, with a maximum of $100,000 per project

Technoclimat, Transition énergétique Québec (TEQ)

The Technoclimat program aims to reduce greenhouse gases and provide financial incentives for the development of new technologies or innovative processes in the area of energy efficiency and emerging energy sources.

Assistance of up to $3 million for demonstrations of new technologies

ÉcoPerformance, Transition énergétique Québec (TEQ)

ÉcoPerformance aims to reduce greenhouse gas emissions and energy consumption of companies by financing projects or measures related to energy consumption and production, as well as process improvement.

Assistance of up to $5,000 per preliminary process integration study and up to $300,000 per site for overall analysis and other specific analyses

Refundable tax credit for technological adaptation services, Revenu Québec

The tax credit for technology adaptation services was introduced to support businesses in collecting and processing strategic information, as well as research, innovation and collaboration with other business partners.

The tax credit may cover up to 40% of expenditures incurred by an eligible corporation under a contract entered into with a college centre for technology transfer (CCTT) or an eligible liaison and transfer centre (CLT).

Créativité Québec, administered jointly by Investissement Québec and MESI

This program is designed to support businesses in completing the phases required for product or process development or improvement.

The amount of financial assistance is a minimum of $50,000 and a maximum of $5 million, loan guarantee of no more than 70% on the net loss; equity investment; grant (exceptionally available).

Credit for university research or research carried out by a public research centre or a research consortium, Revenu Québec

The tax credit for research by universities, public research centres or research consortiums pertains to scientific research and experimental development (SR&ED) that a taxpayer subcontracts to an eligible public research centre, including CRIM, with which the taxpayer is not related.

This refundable tax credit is equal to 14% or 30% of 80% of the amount contracted with the university or research centre for SR&ED work (Scientific Research and Experimental Development Program).

Programme Premier brevet, MESI

The program supports innovative Québec companies in their first steps to protect their intellectual property assets.

Financial assistance is provided in the form of a non-repayable contribution up to a maximum of $25,000.

Québec Apprenticeship Training Tax Credit, Revenu Québec

The program is designed to provide financial support to businesses that offer internships in the workplace through a tax credit.

This program provides access to a refundable tax credit of 24% of eligible expenses.

Industrial Systems Program, Hydro‑Québec

The program covers a wide range of measures to make industrial facilities, processes and electromechanical systems more energy efficient.

Financial assistance covers up to $25,000 per analysis or $100,000 per site for all analytics projects.

Passeport Innovation, MESI The program is designed to support SMEs, not-for-profit cooperatives and social development organizations at various stages of a research and innovation project, and to help them strengthen their innovative capacity.

Financial assistance is provided in the form of a non-repayable contribution of up to 80% of total project expenditures. The assistance may cover up to 50% of eligible expenses.

Programme de recherche en partenariat sur la réduction des émissions de gaz à effet de serre, Québec government

The program is designed to meet the societal challenge of combating climate change by bringing together researchers from complementary disciplinary fields to work in partnership projects to reduce GHG emissions in Québec through calls for tenders and competitive grants.

The maximum financial contribution is $200,000 for a two-year project and $300,000 for a three-year project.

Programme de soutien à la valorisation et au transfert (PSVT), MESI

This program is intended to increase university-business research collaborations and partnerships to facilitate technology transfer and support innovative tech firms in their development phase.

Non-repayable financial assistance up to a maximum of $500,000 per year and 80% of total project expenditures.


For more information about this report, please contact:

Patrick BosséAssurance Partner and Québec Energy Sector Leader patrick.bossé@ca.ey.com

Fany BoucherTransaction Advisory Services Partner [email protected]

Krista RobinsonTax Partner, SR&ED and Business Tax Incentives [email protected]

Karym LahjiouiAdvisory Senior Manager – EY Growth Navigator™ Leader [email protected]

Thibaut MilletClimate Change and Sustainability Partner [email protected]

Cleantech, a sector on the move


AcknowledgementsMany thanks for their support in

conducting the survey: Yacine Ba, Guillaume Darmouni and Victoria Smaniotto.

Thanks as well to: André Barnard, Gregory Brent, Mario Cossette, Katerine Côté, Julie Fournier,

Soraya Khouadri, Elise Laferrière, Roxanne Lafleur, Camille Larivière, Eve Messier,

Ian Rahn, Jean-Christophe Rivard, Jean-Claude Surprenant and

Élizabeth Toporowicz.

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© 2018 Ernst & Young LLP. All Rights Reserved. A member firm of Ernst & Young Global Limited.

2483771 ED NoneThis publication contains information in summary form, current as of the date of publication, and is intended for general guidance only. It should not be regarded as comprehensive or a substitute for professional advice. Before taking any particular course of action, contact EY or another professional advisor to discuss these matters in the context of your particular circumstances. We accept no responsibility for any loss or damage occasioned by your reliance on information contained in this publication.

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Cleantech in Québec - Écotech Québec · The data presented here were compiled from the survey...

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